German Factories See Record Growth as French Economy Steadies

Jana Randow
·1 min read

(Bloomberg) -- German manufacturing increased at a record pace in March, leading an economic revival in Europe that saw French activity stabilize.

Purchasing managers’ indexes from the euro area’s two largest economies beat economists’ estimates as orders rose strongly and confidence that pandemic restrictions will fade eventually bolstered hiring. In Germany, the survey results are “hinting at the prospect of a better than expected economic performance in the first quarter,” said IHS Markit economist Phil Smith.

Optimism in the private sector contrasts with the Bundesbank’s assessment of the economy. The institution predicts a sharp contraction in the three months through March, expressing particular concern about services that have struggled with restrictions.

IHS Markit’s report showed the German services sector saw a “mini revival,” recording its first growth in six months, after the government lifted some lockdown rules. After surging infections forced Chancellor Angela Merkel’s administration to extend restrictions instead of easing them further, short-term risks have increased.

“Businesses remain highly optimistic about the outlook over the coming year, with many pinning their hopes on progress in the vaccine rollout,” Smith said about the latest trends in Germany. “However, with the ‘emergency break’ restrictions coming into effect in April to stem a third wave of infections, the immediate outlook looks less promising.”

The risk of setbacks remains tangible in France as well, where several regions including Paris have been in a new lockdown since Saturday.

Supply constraints are another headache threatening to undermine the recovery. Input costs surged in both countries, squeezing margins and forcing companies to raise prices.

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The report said: "Given the sensitivities of the matter and the fact that it related to internal government complaints handling, the committee believes that it was inappropriate for the First Minister to continue to meet and have discussions with the former first minister on this topic. "She should have made the Permanent Secretary aware of her state of knowledge of the complaints and the facts of the meetings at the earliest opportunity after April 2, at which point she should have confirmed that she would cease to have any further contact with Mr Salmond on that subject." SNP MSPs on the committee however did not agree with this. The Committee on the Scottish Government's Handling of Harassment Complaints published its report less than 24 hours after a separate report by James Hamilton, the independent adviser on the Scottish Ministerial Code, concluded that Nicola Sturgeon had not breached its provisions. The committee said Mr Hamilton's work had been "completely separate from the work of our inquiry". But the MSPs' report said: "It remains the case that the Ministerial Code is also in our remit. We have conducted our own evidence taking on this subject. "We consider it important that we report to the Parliament on the Ministerial Code in order to fulfil our remit." Leaks from Scottish Parliament a 'great shame' Leaks from the Scottish Parliament committee investigating the handling of harassment complaints against Alex Salmond were a "great shame", its convener said. Linda Fabiani said whoever leaked the information should have the "honour" to come forward. Speaking to the BBC's Good Morning Scotland radio programme, she said the leaked elements had been "observations" from some committee members where unanimity had not been reached. "I think that's a great shame because there's so much in this report that was taken seriously and that we reached unanimity on," she said. "And that should absolutely be the part from our report that the Scottish Government considers." Ms Fabiani said she hoped whoever was responsible would have the "dignity and the honour to come forward", saying the virtual nature of the committee meetings had made it hard to tell exactly what was "going on" during the sessions. Some of the committee's unanimous findings were "very critical" of the Government at ministerial and Civil Service level, she said. The background of the saga The Holyrood inquiry into the Scottish Government's unlawful investigation of Alex Salmond has concluded that the First Minister misled the Scottish Parliament. The Committee on the Scottish Government Handling of Harassment Complaints formally published its full report at 8am, more than two years after it was first established. The findings are separate from those of James Hamilton QC, who reported on Monday that there had been no breach of the ministerial code by Nicola Sturgeon over her role in the saga. The cross-party inquiry was set up after a successful judicial review by Mr Salmond resulted in the Scottish Government's investigation being ruled unlawful and "tainted by apparent bias" in 2019. Mr Salmond was awarded a maximum payout of £512,250 after the government conceded the case a week before it was due to be heard in court because of prior contact between the investigating officer Judith Mackinnon and two of the women who made complaints. A Scottish Government policy for handling harassment complaints was drawn up in the wake of the Me Too movement, and was designed to include former ministers in the complaints process for the first time. It states that the investigating officer "will have had no prior involvement with any aspect of the matter being raised", something that fatally undermined the Scottish Government's defence. Committee members have held 14 public evidence sessions, questioning a range of witnesses about the development of the complaints policy that was used unlawfully, the handling of the allegations, Mr Salmond's successful judicial review and the ministerial code. The First Minister was questioned for eight hours about her role in the botched investigation, as well as her predecessor Mr Salmond who used his appearance to accuse the First Minister of multiple breaches of the ministerial code and argue there was a "malicious" plot to remove him from public life. During her virtual appearance, Ms Mackinnon claimed to have always been open about her communication with two women who made complaints although the government's lawyers reportedly only became aware of it in October 2018, months after Mr Salmond's legal challenge had begun. A leak of the report's findings last week suggested the inquiry concluded that Ms Sturgeon gave an "inaccurate" account of her meetings and phone calls with Mr Salmond about the investigation. It also indicated a majority of members are "concerned" it took Ms Sturgeon two months to tell the head of Scotland's civil service she knew about the investigation. Speaking on Monday afternoon after Mr Hamilton's report was published, Ms Sturgeon said: "I look forward, if that's the right expression, to the committee report being published tomorrow and we will look at that in great detail. "But I cannot escape the conclusion that there are some members of that committee, because their public utterances show this, that decided before a single word of evidence had been taken that I was guilty of something and nothing was going to remove them from that view." A motion of no confidence, tabled by the Scottish Conservatives, is due to be debated and voted upon on Tuesday afternoon. Ms Sturgeon added: "I'm confident that vote will express confidence in me. "Remember that the Tories said they would have a confidence vote in me before I uttered a single word of evidence before the parliamentary inquiry. "They have decided on this issue a long time ago this is a political stunt being brought forward by the Tories tomorrow."